New law to earn state additional revenue of Rs 500 crore annually.
New law to earn state additional revenue of Rs 500 crore annually.
The state cabinet on Tuesday approved a new bill which will levy electricity duty (ED) on the industries that have shifted from state power generation company to open access grid. The electricity duty bill will be brought before the state legislature in the monsoon session. When the new law comes into force, it will earn an additional revenue of Rs 500 crore annually for the government, said energy minister Chandrashekhar Bawankule.
The bill has been proposed after it was noticed that industries had started shifting to open grid access after the Centre allowed a change of supplier in the Electricity Act 2003. The open grid allows consumers of 1mw and above to buy cheaper power from other companies in the market.
“The government realized that consumers of open grid access system do not pay electricity duty to the state. This way, the state has been losing approximately Rs 500 crore every year since 2003. The state levies duty on big consumers which enables it to provide subsidised electricity to farmers and domestic consumers. Once the new law comes into force, the government can use the additional duty collected by commercial users to cross-subsidise farmers,” Mr Bawankule said.
The state sells its power at Rs 8 per unit while in the open access, it is Rs 5.5 to Rs 6 per unit. The high power tariff also allows the state to have surplus power as it generates about 17,500mw of the power and demand is about 12,000mw. In the bill, the government has proposed nine per cent electricity duty on open access grid consumers.
“The existing electricity duty act is of 1958. In 2003, the electricity act was enacted after which new concepts emerged. Now anybody can generate electricity and trade it. Commercial consumer using above one mw power can opt for open access grid. These concepts were not covered in the old law. The proposed Maharashtra Electricity Act, 2016 will replace the old law and will cover all the new concepts in electricity trading,” said an official from the power department, who did not wish to be named.
